Correlation Between Massmutual Premier and Catalystcifc Floating

Can any of the company-specific risk be diversified away by investing in both Massmutual Premier and Catalystcifc Floating at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Massmutual Premier and Catalystcifc Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Massmutual Premier Diversified and Catalystcifc Floating Rate, you can compare the effects of market volatilities on Massmutual Premier and Catalystcifc Floating and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Massmutual Premier with a short position of Catalystcifc Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massmutual Premier and Catalystcifc Floating.

Diversification Opportunities for Massmutual Premier and Catalystcifc Floating

-0.27

Correlation Coefficient

Massmutual Premier  Catalystcifc Floating

Very good diversification

The 3 months correlation between Massmutual and Catalystcifc is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Massmutual Premier Diversified and Catalystcifc Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystcifc Floating and Massmutual Premier is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Massmutual Premier Diversified are associated (or correlated) with Catalystcifc Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystcifc Floating has no effect on the direction of Massmutual Premier i.e., Massmutual Premier and Catalystcifc Floating go up and down completely randomly.

Pair Corralation between Massmutual Premier and Catalystcifc Floating

Assuming the 90 days horizon Massmutual Premier is expected to generate 85.16 times less return on investment than Catalystcifc Floating. But when comparing it to its historical volatility, Massmutual Premier Diversified is 41.12 times less risky than Catalystcifc Floating. It trades about 0.03 of its potential returns per unit of risk. Catalystcifc Floating Rate is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  781.00  in Catalystcifc Floating Rate on October 4, 2024 and sell it today you would earn a total of  142.00  from holding Catalystcifc Floating Rate or generate 18.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Massmutual Premier Diversified  vs.  Catalystcifc Floating Rate

Massmutual Premier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Premier Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Massmutual Premier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystcifc Floating

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystcifc Floating Rate are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Catalystcifc Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Massmutual Premier and Catalystcifc Floating

The main advantage of trading using opposite Massmutual Premier and Catalystcifc Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massmutual Premier position performs unexpectedly, Catalystcifc Floating can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Catalystcifc Floating will offset losses from the drop in Catalystcifc Floating's long position.

The idea behind Massmutual Premier Diversified and Catalystcifc Floating Rate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .